Ovitz/28″/mike1st/mark2nd
By FRANK SWERTLOW
Staff Reporter
Sixteen months after his ignominious ouster as president of Walt Disney Co., Michael Ovitz has raised the curtain on the next act of his life and it’s not in Hollywood.
Rather than re-emerge in movie and television production, where he made his fame and fortune as a talent agent, Ovitz has targeted the relatively new frontiers of entertainment retailing, sports and live theater.
Ovitz’s latest deal came last week. He invested $20 million to gain a major stake in Livent Inc., the Toronto-based producer of such live-theater hits as “Ragtime,” “Show Boat” and “Kiss of the Spider Woman.”
The announcement made front-page news in New York and has kept the entertainment world buzzing back in Hollywood.
“He’s back in show business,” said a talent agent who was a rival of Ovitz when he controlled Creative Artists Agency. “Mike could have done a lot of things, started a business, bought a company. But he made a statement with this (Livent) deal. He wants to be in show business again.”
But not mainstream show business, where many decision-makers remain cool to Ovitz, according to several sources.
“Ovitz couldn’t get arrested in L.A.,” said one former studio executive, referring to his de facto ex-communication from Hollywood. “He had to go to New York to find nirvana.”
Ovitz, who rarely spoke to the news media while at CAA or Disney, declined to comment last week. (Such secrecy is not surprising. Many of his fellow CAA agents never knew their secretive boss has his own corporate jet.)
Arthur Rockwell, president of Los Angeles-based Rockwell Capital Markets, concurred that Ovitz’s return to show business via Livent will keep him on “the fringe.”
“Technically, he is back in the business, but Broadway isn’t where the action really is,” Rockwell said. “It’s not like owning a production company.”
Rockwell characterized the move as a value play, with Ovitz getting a major slice of a distressed company at a bargain price. “He was bottom feeding,” Rockwell said.
In his role as CAA chairman, Ovitz was anything but a bottom feeder. He became one of the most powerful and feared men in the entertainment industry. But then he joined Disney in 1995 and left after just 14 months.
Since then, there has been much speculation about what the 50-year-old Ovitz might do, especially since his settlement from Disney is estimated to be worth $200 million, based on the company’s stock value last week.
In a rare public remark, Ovitz told Fortune magazine last year, “Everybody has an opinion about my life. Twenty-five years building CAA it was as if I was never there. One year at Disney, and the rest of it, I guess, was an accident.”
Ovitz’s investment in Livent places him in direct competition with his former boss and friend, Disney Chairman Michael Eisner, albeit on a relatively small stage. Livent’s Ford Center Theater, where “Ragtime” is playing, sits just across 42nd Street from Disney’s New Amsterdam Theater, where “The Lion King” is one of the great smashes on Broadway.
Ovitz could possibly make use of his many contacts in the entertainment industry to secure the rights to a project for the theater, or vice versa, said Dennis McAlpine, an analyst with New York-based investment bank Josephthal & Co.
“If he wanted to get ‘Ragtime’ turned into a film, he would know where to go,” McAlpine said.
While Livent is the latest deal for Ovitz, he has other irons in the fire. He recently joined forces with Herb Glimcher, whose Ohio-based Glimcher Realty Trust, builds shopping malls with entertainment and sports themes. The format is called “entertainment retailing” and is considered to be on the cutting edge of retailing.
Among the most prominent examples are the Forum Shops at Caesar’s Palace in Las Vegas and Ontario Mills in the Inland Empire, according to Adrienne Weiss, president of Adrienne Weiss Corp., a Los Angeles-based retail consulting company.
At the same time, Ovitz has joined the scramble to land a National Football League franchise for Los Angeles. The site is the city of Carson and Ovitz and his partners, who include Glimcher, have secured a $750 million line of credit from Bank of America to finance the deal.
“(Ovitz) approached us,” said Gil Smith, Carson’s city manager. “He was like any other businessman. He made his initial contact with the mayor. He looked like your average well-to-do businessman. His style was not overly dramatic or aggressive. There was nothing to distinguish him as an aggressive promoter. He was soft spoken and not hard sell.”
The group has made its pitch to the NFL, and Smith said he expects the NFL to respond to Ovitz within a matter of weeks.
Ovitz’s other major post-Disney involvement has been the $1.1 billion fund-raising campaign for a new medical center at UCLA, his alma mater. He kicked off that campaign last summer with a $25 million pledge. Ovitz also sits on the executive board of the medical center, where “he exerts a very powerful influence,” a UCLA spokesman said.
Roy Furman, Ovitz’s partner on the Livent deal, said there is no grand plan behind his partner’s various deals.
“I don’t see a grand vision that I know of,” he said. “Each is attractive for its own purpose. They are far flung and don’t have a relationship. People read too much into this. An investor makes investments.”
Furman, who is retiring from the New York investment bank he co-founded, Furman Selz LLC, said Ovitz will remain Los Angeles-based and will not, as some have speculated, move to New York to get involved in the live-theater business.
Furman said he persuaded Ovitz to invest in Livent because the company, which lost $30 million in 1997, is in a strong growth position but was in need of fresh capital.
“There was an opportunity for the right kind of capital to do a great deal within an industry that is on the ascendancy,” Furman said. “The talent is much more interested in doing (live stage performances) than they were in the past, and he has always had a strong relationship with talent.”
But Furman stressed that Ovitz is first and foremost an investor. “He will contribute what he wants to contribute,” Furman said. “He will make suggestions, he will be creative and he has a great Rolodex, which will be very helpful.”
